Bad bets at JPMorgan nearly TREBLE to
£3.7bn - but banking giant still manages to turn a £3.2bn profit

JPMorgan Chase admitted today that the bad trades at its London office have cost it nearly three times the initial $2billion estimate.

The disastrous bets, which were revealed by the U.S. banking giant in May and cost chief investment officer Ina Drew her job, have amounted to $5.8billion (£3.7billion) over the first half of this year.

Despite those losses from its chief investment office, the bank reported three-month net profit of $4.96bn, down 8.7 per cent from the same period last year. JPMorgan's shares opened up 3% in New York.

The bank also revealed that three senior traders associated with the losses - believed to be one known as The London Whale and two other senior managers in London - have followed Ms Drew out the door.

The trades had accounted for losses of $1.4billion (£905.1million) in the first quarter and $4.4billion (£2.8billion) in the second quarter, the bank said.

They contributed to a $400million (£258.6million) fall in second quarter net income to $5billion (£3.2billion) at the bank today.

'Shaken': CEO James Dimon promised to claw back bonuses from the traders responsible for the losses.

And the bank revised down its earnings for the first quarter by $459million (£296.8million) amid claims some of its traders may have been trying to hide the full extent of the losses.

The London Whale has been widely reported to be French-born Bruno Iksil, who gained his nickname because of the size of the positions he took. He was understood to be one of the best paid traders in the City and commuted to London from Paris on a weekly basis.

Insiders at JP Morgan have stressed he is not a rogue trader, but one of a team whose strategy went wrong.

The trading losses are an embarrassment for the bank that came through the 2008 financial crisis in much better health than its peers, steering clear of risky investments that hurt many others.

Chief executive Jamie Dimon had originally dismissed concerns about the bank's trading as a 'tempest in a teapot'.

But he said today that the episode had 'shaken our company to the core', adding: 'We shot ourselves in the foot'.

Its shares have lost about 15 per cent of their market value since the loss was revealed.